This Apple, Inc. Rumor Just Won't Go Away

Apple's (NASDAQ: AAPL) CEO Tim Cook stoked the mobile payment fires again last week, making a number of leading comments to The Wall Street Journal. Cook told the publication that mobile payments continued to be of interest to Apple. During Apple's earnings call, Cook further noted that Apple has some 800 million iTunes accounts, most of them with credit cards on file.

Virtually all sell-side analysts expect Apple to eventually go after mobile payments -- the question is when and how. A push into mobile payments could be a boon to Apple's business, but if it uses Near-Field Communication technology, it won't be the only company to benefit -- NXP Semiconductors (NASDAQ: NXPI) also stands to gain.

KGI revives the NFC rumorKGI Securities analyst Ming-Chi Kuo believes Apple's next iPhones will include NFC chips. Like clockwork, this rumor seems to reappear each and every year ahead of the next iPhone release -- and so far, it's always been wrong. However, to be fair, Kuo has successfully forecast many of Apple's previous product announcements, though his track record isn't perfect.

Apple's competitors, Samsung and Sony, have been including NFC chips in their mobile devices for years. Some of Samsung's most advertised features (S-Beam) rely on the NFC chips present in its Galaxy handsets. Sony uses NFC to allow its Xperia smartphones to pair with other Sony-made electronics.

But if Apple is bringing NFC to the iPhone, it would presumably be used for mobile payments. Other mobile payment upstarts, including ISIS, have attempted to use NFC technology to create mobile payment ecosystems, but so far no one have been unable to crack the market. The problem with NFC-based mobile payments is that it requires merchants to have NFC-compatible terminals. Many still don't, and there's little incentive to install them.

Apple has actively resisted NFC technologyIf Apple does ship an iPhone 6 with an NFC chip, it will mark a dramatic sea change for the company. It hasn't just avoided using NFC technology -- it's actively worked to design alternative solutions. AirDrop, for example, is an Apple-exclusive feature that allows two nearby iPhone owners to send each other data. In other words, it offers near identical functionality to Samsung's S-Beam, but doesn't rely on NFC chips.

iBeacon is Apple's other NFC-alternative. Included in iOS 7, this feature allows iPhones to interact with nearby physical sensors using Bluetooth Low Energy. So far, Apple has yet to really exploit it, but eventually, this could allow iPhones to offer electronic pairing and digital payments without an NFC chip.

The one company that could benefitIgnoring Apple's historical opposition to NFC, assume Kuo is correct. If that's the case, there's one company that stands to benefit: NXP Semiconductors.

The chip company is a major player in the NFC space. In fact, it helped to develop the technology, giving it a robust NFC-related patent portfolio. It also supplies the NFC chips used in many popular smartphones, including the recently released Galaxy S5.

NXP isn't the only maker of NFC chips, and there's no guarantee that if Apple did adopt NFC technology, it would go with NXP as a supplier. Regardless, Apple's embrace of NFC would be a big boost of confidence in NFC's long-term future, which remains somewhat controversial. As long as Apple avoids NFC, there's widespread doubt that it will ever catch on.

But if Kuo is right, the iPhone 6 could serve as a gateway to Apple's next great service -- mobile payments -- and benefit NXP shareholders.

Here's Apple's next revolutionary productMobile payments might be Apple's next great service, but it also has some great products in store. If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.

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Apple has a history of not bringing a product to market -- or even the public eye -- until the product is deemed market-ready. Market readiness requires two things: a product that is ready to fly, and a "market" (user community) that is ready to fly with it. In the case of near-field payment technologies, whether NFC or iBeacon or something else, the "market" includes both the consumer-purchaser of something from a retailer AND the retailer who must purchase and use the retailers' component of the system.

More work is needed to develop an environment in which the retailers are ready and willing to assume their role in the use of such a technology.

Keep in mind that the retailers are looking at the need to upgrade their credit card hardware to include chip technology within a palpable number of months. There's just so much that retailers can absorb in a small space of time. And whatever they are being asked to absorb has to be compelling and meet THEIR needs.

Right now, this is not yet "shovel-ready" in terms of retailer acceptance.

Why bring a service to market (mobile payments) that nobody wants? No one wants to pay extra for something they will not use. Apple was smart to stay away and may be smart to stay away a while longer. Mobil payments HAS NOT caught on with consumers.

NFC could be implemented just to make bluetooth pairing the iPhone and iWatch really easy. It could later be used for mobile payments.

As for NXP, there's potential for Apple just buy up the second biggest NFC chipmaker -- I think it's INSIDE Secure -- for a few million dollars. INSIDE could be had for less than $50 mil probably based on NXP's valuation. That's well within Apple's typical acquisition price range. It did that with its fingerprint sensor and left Validity out in the cold -- or just waiting to get bought out by Synaptics.

Jd. Dream a little. If aapl could cut out visa/mc and lower the cost to the merchant, would you not agree that retailers would quickly adopt? Nfc is unlikely. There are too many existing avenues for clearing transactions, some with little to no investment required by the retailer. It's simply not needed.

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